Study Shows Negative Effects of California Compacts

28 June 2004

VALLEY CENTER, California – (PRESS RELEASE) – A new economic study conducted by Business Research and Economic Advisors (BREA) provides an in-depth market analysis of the unintended negative consequences of the recently announced new Indian gaming compacts with the State of California.

The study was commissioned by the Rincon Luiseno Band of Indians, who has repeatedly expressed concerns over the closed door negotiations between the state and five Indian gaming tribes with large casinos in major metropolitan areas who signed the new compacts.

The study was included in today's filing of a motion for a temporary restraining order against the state's new Indian gaming compacts filed in United States District Court in San Diego by the Rincon Luiseno Band of Indians.

The study reveals the massive destabilization of Indian gaming anticipated as a result of the elimination of limits on slot machines and a proposed new license fee schedule. In addition, the study also reveals how the new compacts will negatively impact many smaller tribes, resulting in significant loss of market share, jobs, revenue, and ultimately their self-reliance.

"These new gaming compacts will create a number of mega-casinos that could put smaller tribes like Rincon out of business and force many of our tribal members back on public assistance," said John Currier, chairman of the Rincon Luiseno Band of Indians. "These new compacts do not foster self-reliance or fair share -- and they are not good for California. We urge the Legislature to reject these new compacts, seek equitable alternatives, and send the state back to the negotiating table. All California tribes should participate in a solution for Indian gaming, not just a handful."

The study makes clear that the new compacts will place many Indian casinos at a distinct economic disadvantage and create a huge disparity between them and large casinos in major metropolitan areas and gateway communities. While the tribes with big gaming operations would be guaranteed protection from commercial competition, the smaller tribal gaming operations will bear the brunt of the unintended consequences of unlimited expansion. Smaller tribal gaming operations, especially those in rural and remote areas, will suffer the most.

"The state may be experiencing budget difficulties, but there's too much at stake to rush these agreements through the legislature," Currier added. "Billions of dollars and thousands of jobs are at stake, as well as huge impacts on the environment, the economy, local infrastructures, and the communities where these mega-casinos will be located."

The Rincon Band's filing for a request for a temporary restraining order is to demonstrate to the court the urgency of the matter. The legislature may be prepared to vote on the new gaming compacts as early as today. "Our goal is to demonstrate how flawed and devastating these new compacts are going to be -- devastating tribes that have only been able to claim self-reliance since 1999, and the fact the state is trying to do this without a vote of the people of California," Currier added.

The Rincon Band's lawsuit, already filed in U.S. District Court against the State of California, argues that the State of California is trying to enter into agreements that significantly change the principles of Indian gaming that California voters overwhelmingly approved with the passage of Proposition 1A and Proposition 5.

"There is no need for unlimited gaming expansion. Indian gaming is about self-reliance, it's not about maximizing profits and tax revenue. The Rincon Band, like other tribes, counts on gaming revenue to help provide better opportunities for our tribal members and to help ensure that they and their families have a brighter future. Ultimately, these new compacts will make it much more difficult for tribes like the Rincon Band to provide for tribal members. There are better alternatives that would include all the California gaming tribes," Currier stated.